Banking Blog

Consumers to surprise on upside

Earlier this week, we released the findings from our October Financial Security Index poll. Only 11 percent of Americans, roughly 1 in 10, are more comfortable with the savings they have now, compared to a year ago. When we asked about debt, about 1 in 5 Americans said they're more comfortable with their debt now versus a year ago -- and that percentage has been declining every month since June. As of early October, only 19 percent of Americans said they had higher net worth than one year ago, while 30 percent reported lower net worth than a year ago.

However, there are some bright spots for consumers.

Interest rates are the lowest we've ever seen, particularly on auto loans. We're seeing rates around 2.5 percent or 3 percent on new or used cars. Coming off a couple of tough economic years, there are a lot of people who delayed buying cars, either out of uncertainty or out of necessity. Mix that pent-up demand and the need to replace vehicles that are no longer going to run with these record-low interest rates, and there's some pickup there. And I think that's good news.

Also, I think we may be pleasantly surprised with holiday retail sales. The past couple of weeks, we've had a better tone of economic data. We're certainly not out of the woods, but it has decreased the odds of a recession. I expect we're going to get a little brighter tone in our November poll. And, of course, that’s just in time for holiday shopping season. Retail sales have held in there very nicely the past few months, even with abysmal economic data. Now that it's looking a little bit better, I'm positive. I think consumers are going to surprise us on the upside.

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2 Comments

BF Hires

November 01, 2011 at 4:58 pm

I note that Bank Of America is not alone in the public's "bank fee add on's". However, it is refreshing to witness B of A's listening attitude to it's customer base. BF Hires.

BF Hires

November 01, 2011 at 4:53 pm

Following the news of today, November 1, 2011, The practice of initiating fees for debit card usage began earlier last summer (2011). As Regions Bank notified me by email, I chose to move my $27,000.00 auto loan, close my safe deposit box, and close my savings and checking accounts. After spending down my accounts by on-line and debit card purchases, I had $1.99 left in the two accounts which Regions Bank kindly wrote to me that it had chosen to keep any remaining funds left. I sent emails of protest with no avail. By comparison, I close my checking account with Chase Bank who promptly mailed a check for remaining funds of 0.17 cents, and then continued to provide excellent professional service on my credit card with Chase until I paid it off later. I write this complaint about Regions Bank because of such lack of professionalism and the apparent personal vendetta. Hopefully, this note is passed on to Regions as an indication of its ill repute on the industry. BF Hires/20111101.

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